(3) On receipt of the demographic information and biometric information under sub-section (1), the Authority shall, after verifying the information, in such manner as may be specified by regulations, issue an Aadhaar number to such individual.” Significantly, sub-section (1) of Section 3 recognises an entitlement, of every resident55 to obtain an Aadhaar number. An entitlement postulates a right. A right contemplates a liberty, for it is in the exercise of the liberty that the individual asserts a right. What is a matter of an entitlement is evidently a matter of option and not a compulsion. That constitutes the fundamental postulate of Section 3. However, the entitlement to obtain the Aadhaar 55 Section 2(v) states: “resident” means an individual who has resided in India for a period or periods amounting in all to one hundred and eighty-two days or more in the twelve months immediately preceding the date of application for enrolment 76 PART D number is conditioned by the requirement of submitting demographic and biometric information and participating in the process of enrolment. 43 The collection of demographic and biometric information is carried out by an enrolling agency. “Enrolling agency” has been defined under Section 2(l) of the Act as an agency, appointed by UIDAI or a Registrar56, for collecting demographic and biometric information of individuals under the Act. The enrolling agency need not be an entity of the state. The definition opens the space for engagement of private entities in the collection of individual information for the process of enrolment. The enrolling agencies have to set up enrolment centers and they have to function in accordance with the procedure specified by UIDAI.57 Sub-section (2) of Section 3 requires the enrolling agency to disclose to the individual, who is undergoing enrolment, three important facets. The first is the manner in which the information which is disclosed by the individual would be used. The second relates to the nature of the recipients with whom the information is likely to be shared during the course of authentication. The third is founded upon the individual’s right of access to the information disclosed. All these three facets are crucial to the legislative design because they try to place individual autonomy at the forefront of the process. An individual who discloses biometric and demographic information has a statutory entitlement to fully understand how the information which is disclosed is going to be used and with whom the 56 Section 2(s) states: “Registrar” means any entity authorised or recognised by the Authority for the purpose of enrolling individuals under this Act 57 Regulation 7, Aadhaar (Enrolment and Update) Regulations, 2016 77 PART D information is likely to be shared during authentication.58 Access of the information supplied to the individual, it has been argued, is an integral feature of the design created by the statute. These three facets are conditions precedent to the disclosure of information by the individual. Before the individual does so, he or she must have a full disclosure which would enable them to form an informed decision on the exercise of the choice which underlies an entitlement to an Aadhaar number. The entitlement which is recognised by sub-section (1) is enforced by the mandatory requirements of sub-section (2). Before an Aadhaar number is issued, sub-section (3) requires the authority to verify the information disclosed, in the manner prescribed by regulations. The Act leaves it to regulations to specify how verification will be carried out.
44 Sections 4, 5 and 6 indicate the characteristics which are attributed to Aadhaar numbers, legislative recognition of the steps necessary to ensure financial inclusion and the requirement of periodical updation of information. Under Section 4, three important features attach to the possession of an Aadhaar number. The first is that the number is unique to one individual and to that individual alone. Once assigned, the Aadhaar number cannot be reassigned to any other individual. The second feature is that an Aadhaar number is random and bears no relation to the attributes or identity of its holder. The third feature of Section 4 is that once assigned, an Aadhaar number can be accepted as proof of identify of its holder “for any purpose”. 58 Section 3(2), Aadhaar Act.
78 PART D Under Section 5, UIDAI is under a mandate to adopt special measures to issue Aadhaar numbers to women, children, senior citizens, the differently abled, unskilled and unorganised workers, nomadic tribes, persons who do not have permanent places of abode and to other categories which may be defined by the regulations. Section 6 contains an enabling provision by which the authority may require holders to update their demographic and biometric information periodically, as specified under regulations. An Aadhaar number also does not, by itself, constitute a conferment of a right of citizenship, or domicile (Section 9).
45 Chapter III provides for Authentication. By virtue of Section 7, an enabling provision has been made by which the Union or state governments may require proof of an Aadhaar number for receiving subsidies, benefits and services for which the expenditure is incurred from (or the receipts form part of) the Consolidated Fund of India. Section 7 is in the following terms:
“7. Proof of Aadhaar number necessary for receipt of certain subsidies, benefits and services, etc.- The Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India, require that such individual undergo authentication, or furnish proof of possession of Aadhaar number or in the case of an individual to whom no Aadhaar number has been assigned, such individual makes an application for enrolment:
Provided that if an Aadhaar number is not assigned to an individual, the individual shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service.” 79 PART D Section 3 (as explained earlier) postulates an entitlement to an Aadhaar number. An entitlement envisages a right which may (or may not) be exercised by the resident. An entitlement is, after all, an option. Section 7, however, contemplates a requirement. It covers subsidies, benefits or services that are charged to the Consolidated Fund of India; the connect being either in regard to the source of expenditure or the receipts. The statutory definitions of the expressions ‘benefit’, ‘service’ and ‘subsidy’ are contained in clauses (f),(w) and (x) of Section 2 which provide as follows:
“(f) “benefit” means any advantage, gift, reward, relief, or payment, in cash or kind, provided to an individual or a group of individuals and includes such other benefits as may be notified by the Central Government;” (w) “service” means any provision, facility, utility or any other assistance provided in any form to an individual or a group of individuals and includes such other services as may be notified by the Central Government;
(x) “subsidy” means any form of aid, support, grant, subvention, or appropriation, in cash or kind, to an individual or a group of individuals and includes such other subsidies as may be notified by the Central Government.” 46 Section 7 encapsulates a purpose, a condition and a requirement. The purpose incorporated in the provision is to establish the identity of an individual. The condition which it embodies is for the receipt of a subsidy, benefit or service for which the expenditure is incurred or the receipts form part of the Consolidated Fund of India. Where the purpose and condition are fulfilled, the central or state governments may require that the individual should (i) undergo authentication; or (ii) furnish proof of possession of an Aadhaar number; or (iii) provide proof of an application for enrolment where 80 PART D the Aadhaar number has not been assigned. Three alternatives are stipulated in Section 7. Where the purpose and condition (noted above) are fulfilled, the individual has to undergo authentication. Alternately, the individual has to furnish proof that he or she possesses an Aadhaar number. However, if an Aadhaar number has not been assigned to the individual, he or she would have to make an application for enrolment. In a situation where no Aadhaar number has been assigned as yet, the proviso stipulates that alternate and viable means of identification would be provided to the individual for the delivery of subsidies, benefits or services. Section 7 indicates that while the central or state governments can mandate that an individual must undergo authentication as a condition for the receipt of a subsidy, benefit or service, a failure of authentication cannot be held out as a ground to deny benefits, subsidies or services. That is for the reason that in the absence of authentication, possession of an Aadhaar number would suffice. Moreover, even if an individual does not possess an Aadhaar number, the mandate of Section 7 would be subserved by producing an application for enrolment. Section 3 which speaks of an entitlement to obtain an Aadhaar number stands in contrast to Section 7 under which an Aadhaar number may be required as a condition for the receipt of a subsidy, benefit or service. As an entitlement, Section 3 makes the possession of an Aadhaar number optional. Section 7 is an enabling power by which the central or state governments may make the requirement of an Aadhaar number compulsive or mandatory where a person 81 PART D desires a subsidy, benefit or service for which expenditure is incurred from or the receipt of which forms part of the Consolidated Fund of India. Section 7 acts as an overriding provision over Section 3. 47 The manner in which an authentication is carried out is elaborated upon by Section 8. Section 8 is in the following terms:
“Authentication of Aadhaar number.-
(1) The Authority shall perform authentication of the Aadhaar number of an Aadhaar number holder submitted by any requesting entity, in relation to his biometric information or demographic information, subject to such conditions and on payment of such fees and in such manner as may be specified by regulations.
(2) A requesting entity shall – (a) unless otherwise provided in this Act, obtain
the consent of an individual before collecting his identity information for the purposes of authentication in such manner as may be specified by regulations; and
(b) ensure that the identity information of an individual is only used for submission to the Central Identities Data Repository for authentication.
(3) A requesting entity shall inform, in such manner as may be specified by regulations, the individual submitting his identify information for authentication, the following details with respect to authentication, namely:-
(a) the nature of information that may be shared upon authentication;
(b) the uses to which the information received during authentication may be put by the requesting entity; and
(c) alternatives to submission of identity information to the requesting entity.
(4) The Authority shall respond to an authentication query with a positive, negative or any other appropriate response sharing such identity information excluding any core biometric information.” As we have noticed earlier, authentication involves a process in which the Aadhaar number, together with the demographic or biometric information, is 82 PART D submitted to the CIDR for verification and is verified to be correct or otherwise by the repository on the basis of the information available with it. Under sub-
section (1) of Section 8 authentication has to be performed on a request submitted by a requesting entity. The expression ‘requesting entity’ is defined in Section 2(u) as follows:
“(u) “requesting entity” means an agency or person that submits the Aadhaar number, and demographic information or biometric information, of an individual to the Central Identities Data Repository for authentication.” This definition also does not prohibit the engagement of private agencies for the process of authentication. Under sub-section (2) of Section 8, every requesting entity is bound to obtain the consent of the individual before collecting his or her identity information for the purpose of authentication.
Moreover, the requesting entity must ensure that the identity information is submitted only for the purpose of authentication to the CIDR. Before the requesting entity submits the identity information for authentication, it is under a mandate of law to disclose (i) the nature of the information that may be shared upon authentication; (ii) the use to which information received during authentication may be put; and (iii) alternatives to the submission of identity information.59 During the course of authentication, UIDAI is required to respond to an authentication query with a positive, negative or appropriate response sharing such identity information excluding core biometric information.60 Core biometric information cannot be shared. The modes of 59 Section 8(3), Aadhaar Act 60 Section 8(4), Aadhaar Act 83 PART D authentication are as mentioned in Regulation 4 of the Aadhaar (Authentication) Regulations 2016. It can be based on (i) demographic information; (ii) a one-time password with limited time validity; (iii) biometrics or (iv) multi-factor authentication (a combination of two or more of the above). The Requesting Agency chooses the mode according to its requirement. 48 UIDAI is the umbrella entity under the Aadhaar Act. The statutory backing to the authority of UIDAI to undertake the responsibility for the processes of enrolment and authentication and maintenance of CIDR has been provided under Chapter IV of the Act. Section 11 provides that the Central Government shall, by notification, establish UIDAI, a body corporate 61, to be responsible for the processes of enrolment and authentication and perform such other functions as are assigned to it under the Act. The composition of UIDAI has been provided under Section 12: a Chairperson (appointed on part-time or full-time basis); two part-time Members, and the chief executive officer who shall be the Member- Secretary, to be appointed by the Central Government. Section 23 enunciates the powers and functions of the UIDAI. Sub-section (1) of Section 23 requires UIDAI to develop the policy, procedure and systems for issuing Aadhaar numbers to individuals and to perform authentication. Section 23(2) provides an inclusive list of the powers and functions of UIDAI:
“(2) Without prejudice to sub-section (1), the powers and functions of the Authority, inter alia, include— 61 Section 11(2), Aadhaar Act 84 PART D
(a) specifying, by regulations, demographic information and biometric information required for enrolment and the processes for collection and verification thereof;
(b) collecting demographic information and biometric information from any individual seeking an Aadhaar number in such manner as may be specified by regulations;
(c) appointing of one or more entities to operate the Central Identities Data Repository;
(d) generating and assigning Aadhaar numbers to individuals;
(e) performing authentication of Aadhaar numbers;
(f) maintaining and updating the information of individuals in the Central Identities Data Repository in such manner as may be specified by regulations;
(g) omitting and deactivating of an Aadhaar number and information relating thereto in such manner as may be specified by regulations;
(h) specifying the manner of use of Aadhaar numbers for the purposes of providing or availing of various subsidies, benefits, services and other purposes for which Aadhaar numbers may be used;
(i) specifying, by regulations, the terms and conditions for appointment of Registrars, enrolling agencies and service providers and revocation of appointments thereof;
(j) establishing, operating and maintaining of the Central Identities Data Repository;
(k) sharing, in such manner as may be specified by regulations, the information of Aadhaar number holders, subject to the provisions of this Act;
(l) calling for information and records, conducting inspections, inquiries and audit of the operations for the purposes of this Act of the Central Identities Data Repository, Registrars, enrolling agencies and other agencies appointed under this Act;
(m) specifying, by regulations, various processes relating to data management, security protocols and other technology safeguards under this Act;
(n) specifying, by regulations, the conditions and procedures for issuance of new Aadhaar number to existing Aadhaar number holder;
(o) levying and collecting the fees or authorising the Registrars, enrolling agencies or other service providers to 85 PART D collect such fees for the services provided by them under this Act in such manner as may be specified by regulations;
(p) appointing such committees as may be necessary to assist the Authority in discharge of its functions for the purposes of this Act;
(q) promoting research and development for advancement in biometrics and related areas, including usage of Aadhaar numbers through appropriate mechanisms;
(r) evolving of, and specifying, by regulations, policies and practices for Registrars, enrolling agencies and other service providers;
(s) setting up facilitation centres and grievance redressal mechanism for redressal of grievances of individuals, Registrars, enrolling agencies and other service providers;
(t) such other powers and functions as may be prescribed.” Under Section 54, UIDAI is empowered to make regulations and rules consistent with the Act, for carrying out the provisions of the Act. Sub-section (2) of Section 54 provides that UIDAI may make regulations covering any of the following matters:
“(a) the biometric information under clause (g) and the demographic information under clause (k), and the process of collecting demographic information and biometric information from the individuals by enrolling agencies under clause (m) of section 2;
(b) the manner of verifying the demographic information and biometric information for issue of Aadhaar number under sub- section (3) of section 3;
(c) the conditions for accepting an Aadhaar number as proof of identity of the Aadhaar number holder under sub-section (3) of section 4;
(d) the other categories of individuals under section 5 for whom the Authority shall take special measures for allotment of Aadhaar number;
(e) the manner of updating biometric information and demographic information under section 6;
(f) the procedure for authentication of the Aadhaar number under section 8;86
PART D
(g) the other functions to be performed by the Central Identities Data Repository under section 10;
(h) the time and places of meetings of the Authority and the procedure for transaction of business to be followed by it, including the quorum, under sub-section (1) of section 19;
(i) the salary and allowances payable to, and other terms and conditions of service of, the chief executive officer, officers and other employees of the Authority under sub-section (2) of section 21;
(j) the demographic information and biometric information under clause (a) and the manner of their collection under clause (b) of sub-section (2) of section 23;
(k) the manner of maintaining and updating the information of individuals in the Central Identities Data Repository under clause (f) of sub-section (2) of section 23;
(l) the manner of omitting and deactivating an Aadhaar number and information relating thereto under clause (g) of sub-section (2) of section 23;
(m) the manner of use of Aadhaar numbers for the purposes of providing or availing of various subsidies, benefits, services and other purposes for which Aadhaar numbers may be used under clause (h) of sub-section (2) of section 23;
(n) the terms and conditions for appointment of Registrars, enrolling agencies and other service providers and the revocation of appointments thereof under clause (i) of sub- section (2) of section 23;
(o) the manner of sharing information of Aadhaar number holder under clause (k) of sub-section (2) of section 23;
(p) various processes relating to data management, security protocol and other technology safeguards under clause (m) of sub-section (2) of section 23;
(q) the procedure for issuance of new Aadhaar number to existing Aadhaar number holder under clause (n) of sub- section (2) of section 23;
(r) manner of authorising Registrars, enrolling agencies or other service providers to collect such fees for services provided by them under clause (o) of sub-section (2) of section 23;
(s) policies and practices to be followed by the Registrar, enrolling agencies and other service providers under clause
(r) of sub-section (2) of section 23;
87 PART D
(t) the manner of accessing the identity information by the Aadhaar number holder under the proviso to sub-section (5) of section 28;
(u) the manner of sharing the identity information, other than core biometric information, collected or created under this Act under sub-section (2) of section 29;
(v) the manner of alteration of demographic information under sub-section (1) and biometric information under sub-section (2) of section 31;
(w) the manner of and the time for maintaining the request for authentication and the response thereon under sub-section (1), and the manner of obtaining, by the Aadhaar number holder, the authentication records under sub-section (2) of section 32;
(x) any other matter which is required to be, or may be, specified, or in respect of which provision is to be or may be made by regulations.” Section 11(1), read with Sections 23(2) and 54(2), indicates that UIDAI is the sole authority vested with the power and responsibility of carrying out numerous functions. These functions include:
(i) collection of demographic information and biometric information from individuals;
(ii) generating and assigning Aadhaar numbers to individuals;
(iii) performing authentication of Aadhaar numbers;
(iv) maintaining and updating the information of individuals in the CIDR;
(v) omitting and deactivating of an Aadhaar number;
(vi) specifying the manner of use of Aadhaar numbers for the purposes of providing or availing of various subsidies, benefits, services and other purposes;
88 PART D
(vii) specifying the terms and conditions for appointment of Registrars, enrolling agencies and service providers and revocation of appointments;
(viii) specifying various processes relating to data management, security protocols and other technological safeguards under the Act;
(ix) setting up facilitation centres and mechanisms for the redressal of the grievances of individuals, Registrars, enrolling agencies and other service providers; and
(x) other functions prescribed by the Central government. The Act does not set any limits within which the sole authority of UIDAI may operate. UIDAI has been conferred with discretionary powers as provided in the above provisions. The architecture of Aadhaar keeps UIDAI at the centre of all processes.
49 For the purpose of performing the functions of collecting, storing, securing, processing of information, delivery of Aadhaar numbers to individuals or performing authentication, clause (a) of Section 23(3) contemplates that UIDAI may enter into Memoranda of Understanding or agreements with the central or state governments, Union territories or other agencies. In discharging its functions, UIDAI may appoint, by notification, a number of Registrars, engage and authorise such agencies to collect, store, secure and process information or perform authentication or such other functions in relation to it, as may be necessary for the purposes of the Act 89 PART D (Section 23 (3) (b)). For the efficient discharge of its functions, UIDAI may also engage consultants, advisors and other persons as may be required (Section 23(4)). These, like many other provisions, open the scope for the involvement of private entities in the Aadhaar project. This is also evident from Section 57 of the Act, which allows the use of the Aadhaar number, by the state, corporate entities or persons to establish the identity of an individual:
“57. Act not to prevent use of Aadhaar number for other purposes under law.-
Nothing contained in this Act shall prevent the use of Aadhaar number for establishing the identity of an individual for any purpose, whether by the State or any body corporate or person, pursuant to any law, for the time being in force, or any contract to this effect:
Provided that the use of Aadhaar number under this section shall be subject to the procedure and obligations under section 8 and Chapter VI.” 50 The responsibility to ensure the security of identity information and authentication records of individuals has been placed on UIDAI. 62 UIDAI is also required to ensure confidentiality of identity information and authentication records of individuals,63 except in circumstances, where disclosure of information is permitted by the Act.64 Section 28(3) requires UIDAI to take all necessary measures to ensure that the information in its possession or control, including information stored in the CIDR, is secured and protected against access, use or disclosure not permitted under the Act or regulations, and against accidental or intentional destruction, loss or damage. For the purpose 62 Section 28(1), Aadhaar Act 63 Section 28(2), Aadhaar Act 64 Section 33, Aadhaar Act 90 PART D of maintaining the security and confidentiality of the information of individuals, UIDAI is also required, under Section 28(4), to:
“(a) adopt and implement appropriate technical and organisational security measures;
(b) ensure that the agencies, consultants, advisors or other persons appointed or engaged for performing any function of the Authority under this Act, have in place appropriate technical and organisational security measures for the information; and
(c) ensure that the agreements or arrangements entered into with such agencies, consultants, advisors or other persons, impose obligations equivalent to those imposed on the Authority under this Act, and require such agencies, consultants, advisors and other persons to act only on instructions from the Authority.” Except where it has otherwise been provided in the Aadhaar Act, a burden is placed (under Section 28(5)) upon UIDAI, its officers, other employees (whether during service or thereafter), and any agency that maintains the CIDR not to reveal any information stored or the authentication record to anyone. An Aadhaar number holder, however, may request UIDAI to provide access to identity information excluding core biometric information in the manner as may be specified by regulations (proviso to Section 28(5)). Section 29 puts restrictions on sharing of information, collected or created under the Act. Sub-section (1) of Section 29 provides that:
“(1) No core biometric information, collected or created under this Act, shall be—
(a) shared with anyone for any reason whatsoever; or
(b) used for any purpose other than generation of Aadhaar numbers and authentication under this Act.” 91 PART D Sub-section (2) contemplates that the identity information, other than core biometric information, collected or created under the Act may be shared only in accordance with the provisions of the Act and in the manner as may be specified by regulations.
A burden is placed, under Section 29(3), upon a requesting entity to ensure that any identity information available with it, is neither used for any purpose, other than that specified to the individual at the time of submitting identity information for authentication; nor disclosed further, except with the prior consent of the individual to whom such information relates. Sub-section (4) prohibits publishing, display or posting publicly of any Aadhaar number or core biometric information collected or created under the Act in respect of an Aadhaar number holder, except for such purposes as may be specified by the regulations. Section 30 contemplates that the biometric information collected and stored in an electronic form is to be deemed “sensitive personal data or information”. The provision specifically relates to biometric information. The provision dilutes the protection that should be given to demographic information. Further, a statutory duty has been placed upon UIDAI to maintain authentication records in the manner and for a time period prescribed by regulations.65 The issue of maintenance of authentication records by UIDAI has been contentious and is dealt in a subsequent section titled “Proportionality”. A statutory right is provided to every Aadhaar number 65 Section 32(1), Aadhaar Act 92 PART D holder to obtain his authentication record in the manner specified by regulations.66 Section 32(3) prohibits UIDAI (either by itself or through any entity under its control) to collect, keep or maintain any information about the purpose of authentication.
51 The Aadhaar Act allows disclosure of individual information in limited circumstances. The manner and purpose for which information of individuals, including identity information or authentication records, can be disclosed has been provided under Section 33 of the Act. Section 33 states:
“(1) Nothing contained in sub-section (2) or sub-section (5) of section 28 or sub-section (2) of section 29 shall apply in respect of any disclosure of information, including identity information or authentication records, made pursuant to an order of a court not inferior to that of a District Judge:
Provided that no order by the court under this sub-section shall be made without giving an opportunity of hearing to the Authority.
(2) Nothing contained in sub-section (2) or sub-section (5) of section 28 and clause (b) of sub-section (1), sub-section (2) or sub-section (3) of section 29 shall apply in respect of any disclosure of information, including identity information or authentication records, made in the interest of national security in pursuance of a direction of an officer not below the rank of Joint Secretary to the Government of India specially authorised in this behalf by an order of the Central Government:
Provided that every direction issued under this sub-section, shall be reviewed by an Oversight Committee consisting of the Cabinet Secretary and the Secretaries to the Government of India in the Department of Legal Affairs and the Department of Electronics and Information Technology, before it takes effect:
Provided further that any direction issued under this sub-
section shall be valid for a period of three months from the 66 Section 32(2), Aadhaar Act 93 PART D date of its issue, which may be extended for a further period of three months after the review by the Oversight Committee.” The Aadhaar Act provides two categories: a “court order” and “in the interest of national security”, where the personal information of an individual can be disclosed.
Under Section 31, in case any demographic information or biometric information of an Aadhaar number holder is found to be incorrect, is lost or changes subsequently, the Aadhaar number holder is required to request UIDAI to make an alteration in his or her record in the CIDR in the manner specified by regulations. On receipt of a request for alteration of demographic or biometric information, UIDAI is vested with the power, subject to its satisfaction, to make alterations as required in the record relating to the Aadhaar number holder and to intimate the alteration to the holder. Sub- section (4) of Section 31 prohibits alteration of any identity information in the CIDR except in the manner provided in the Act or regulations made in this behalf.
52 Chapter VII provides offences and penalties. Under Section 34, a penalty has been provided for impersonation at the time of enrolment. Section 35 creates a penalty for impersonation of the Aadhaar number holder by changing demographic or biometric information. Section 37 provides a penalty 94 PART D for disclosing identity information (which was collected in the course of enrolment or authentication).
Under Section 38, a penalty for unauthorised access to the CIDR has been provided. Section 38 provides thus:
“Whoever, not being authorised by the Authority, intentionally,—
(a) accesses or secures access to the Central Identities Data Repository;
(b) downloads, copies or extracts any data from the Central Identities Data Repository or stored in any removable storage medium;
(c) introduces or causes to be introduced any virus or other computer contaminant in the Central Identities Data Repository;
(d) damages or causes to be damaged the data in the Central Identities Data Repository;
(e) disrupts or causes disruption of the access to the Central Identities Data Repository;
(f) denies or causes a denial of access to any person who is authorised to access the Central Identities Data Repository;
(g) reveals any information in contravention of sub-section (5) of section 28, or shares, uses or displays information in contravention of section 29 or assists any person in any of the aforementioned acts;
(h) destroys, deletes or alters any information stored in any removable storage media or in the Central Identities Data Repository or diminishes its value or utility or affects it injuriously by any means; or
(i) steals, conceals, destroys or alters or causes any person to steal, conceal, destroy or alter any computer source code used by the Authority with an intention to cause damage, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to a fine which shall not be less than ten lakh rupees.” 95 PART D Section 39 imposes a penalty for tampering with data in the CIDR. Sections 40 and 41 impose penalties on requesting and enrolment agencies in case they act in contravention of the obligations imposed upon them under the Act. Section 42 provides for a general penalty for an offence under the Act or the rules or regulations made thereunder, for which no specific penalty is provided under the Act. Under Section 43, when an offence has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Section 44 indicates that the provisions of the Act would apply to any offence or contravention committed outside India by any person, irrespective of nationality. The power to investigate offences under the Act has been placed, under Section 45, on a police officer not below the rank of Inspector of Police. Section 47(1) of the Act puts a bar on the courts from taking cognizance of any offence punishable under the Act, except when a complaint is made by UIDAI or any officer or person authorised by it. The provision indicates that the scope of cognizance is limited. It does not allow an individual who finds that there is any violation under the Act, to initiate criminal proceedings. The scope of grievance redressal under the Act is restrictive and works only on the action of UIDAI or a person authorised by it. UIDAI has set up a grievance redressal mechanism as contemplated by Section 23(2)(s) of the Aadhaar Act. There is 96 PART D no grievance redressal mechanism if any breach or offence is committed by UIDAI itself. The right of an individual to seek remedy under the Act if his/her rights are violated will be discussed subsequently. Under sub-Section (2), no court inferior to that of a Chief Metropolitan Magistrate or a Chief Judicial Magistrate can try any offence punishable under the Act. Section 48 empowers the Central Government to supersede UIDAI, in certain situations. Under Section 50, UIDAI, in exercise of its powers or performance of its functions under the Act, shall be bound by the written directions on questions of policy of the Central Government. Section 51 vests power in UIDAI to delegate to any member, officer or any other person, its powers and functions under the Act (except the power under section 54) as it may deem necessary. Section 51 grants a wide discretion to the UIDAI to delegate any of its powers and functions.
Section 55 requires every rule and regulation made under the Aadhaar Act to be laid down before each House of Parliament. The Section states:
“55. Laying of rules and regulations before Parliament.-
Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation, or both the Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that 97 PART E any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.” UIDAI needs to place the regulations framed by it before Parliament. 53 The architecture of Aadhaar is integral to the exercise of analyzing the reasonableness of the entire project. Whether the architecture addresses the concerns raised by the petitioners is an essential component of this exercise. The architecture of Aadhaar must pass the constitutional requirements of reasonableness and proportionality. This aspect will be dealt under the heading of “proportionality” in a subsequent part of this judgment.
E Passage of Aadhaar Act as a Money Bill 54 The petitioners challenge the constitutionality of the Aadhaar Act,
contending that it could not have been passed as a Money Bill. According to the submission, the Aadhaar Act did not qualify as a Money Bill under Article 110 of the Constitution, and it legislates on matters which fall outside that provision. The Attorney General for India submitted that the Constitution accords finality to the decision of the Speaker as to whether a Bill is a Money Bill and hence the question whether the Aadhaar Act fulfils the requirements of being categorized as Money Bill is not open to judicial review. The Attorney General also urged that the Aadhaar Act does fall under Article 110. Article 110 provides thus:
98 PART E “(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:—
(a) the imposition, abolition, remission, alteration or regulation of any tax;
(b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
(c) the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) the appropriation of moneys out of the Consolidated Fund of India;
(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
(f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
(g) any matter incidental to any of the matters specified in sub-clauses (a) to (f).
(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final.
(4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.” 55 The key questions before this Court are:
(i) Whether under Article 110(3), the decision of the Speaker of the Lok Sabha, that a Bill is a Money Bill, is immune from judicial review; 99 PART E
(ii) If the answer to (i) is in the negative, whether the Aadhaar Act is a Money Bill under Article 110(1) of the Constitution; and
(iii) If the Bill to enact the Aadhaar Act was not a Money Bill, whether a declaration of unconstitutionality will result from its legislative passage as a Money Bill in the Lok Sabha.
E.I Judicial Review of the Speaker’s Decision 56 Article 109 provides for a special procedure in respect of Money Bills. It provides that a Money Bill shall not be introduced in the Council of States, the Rajya Sabha. After a Money Bill is introduced in the Lok Sabha and passed by it, the Bill has to be transmitted to the Rajya Sabha for its recommendations. Article 110(4) provides that when a ‘Money Bill’ is transmitted from the Lower House to the Upper House, it must be endorsed with a certificate by the Speaker of the Lower House that it is a Money Bill. From the date of the receipt of the Money Bill, the Rajya Sabha is bound to return the Bill to the Lok Sabha, within a period of fourteen days, with its recommendations. The Lok Sabha has the discretion to “either accept or reject all or any of the recommendations” made by the Rajya Sabha.67 If the Lok Sabha accepts any of the recommendations of the Rajya Sabha, the Money Bill is deemed to have been passed by both Houses of the Parliament “with the amendments recommended” by the Rajya Sabha and accepted by the Lok Sabha.68 67 Article 109(2), The Constitution of India 68 Article 109(3), The Constitution of India 100 PART E However, when the Lok Sabha “does not accept any of the recommendations” of the Rajya Sabha, the Money Bill is said to have been passed by both Houses in the form in which it was originally passed by the Lok Sabha.69 If a Money Bill after being passed by the Lok Sabha and transmitted to the Rajya Sabha for its recommendations is not returned to the Lok Sabha within a period of fourteen days, it is then deemed to have been passed by both the Houses of the Parliament in the form in which it was originally passed by the Lok Sabha.70 When a Money Bill has been passed by the Houses of the Parliament, Article 111 requires it to be presented to the President along with the Lok Sabha Speaker’s certificate for assent71. Article 117(1) also provides that a Bill “making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110” shall also not be introduced in the Rajya Sabha.
57 The Constitution contains corresponding provisions for Money Bills introduced in and passed by a state legislative assembly. Article 198 provides a special procedure for Money Bills in the state legislative assembly. Article 199(3) provides for the finality of the decision of the Speaker of the Legislative Assembly. Under Article 200, when a Money Bill has been passed by the State Legislature, it is to be presented to the Governor, along with the Speaker’s certificate, for assent.72 69 Article 109(4), The Constitution of India 70 Article 109(5), The Constitution of India 71 Article 110(4), The Constitution of India 72 Article 199(4), The Constitution of India 101 PART E Article 107 contains provisions for the introduction and passing of Bills in general and provides thus:
“(1) Subject to the provisions of articles 109 and 117 with respect to Money Bills and other financial Bills, a Bill may originate in either House of Parliament. (2) Subject to the provisions of articles 108 and 109, a Bill shall not be deemed to have been passed by the Houses of Parliament unless it has been agreed to by both Houses, either without amendment or with such amendments only as are agreed to by both Houses. (3) A Bill pending in Parliament shall not lapse by reason of the prorogation of the Houses.
(4) A Bill pending in the Council of States which has not been passed by the House of the People shall not lapse on a dissolution of the House of the People.
(5) A Bill which is pending in the House of the People, or which having been passed by the House of the People is pending in the Council of States, shall, subject to the provisions of article 108, lapse on a dissolution of the House of the People.” 58 Ordinary bills can be passed only when they are agreed to by both Houses. Amendments suggested by one House have to be agreed upon by both the Houses for the bill to be passed. Both Houses of Parliament have a vital role assigned by the Constitution in the passage of ordinary bills. Deviating from the important role which it assigns to the Rajya Sabha in the passage of legislation, the Constitution carves out a limited role for the Rajya Sabha in the passage of Money Bills.
59 The Constitution confers special powers on the Speaker of the Lok Sabha in the passage of a Money Bill. Ordinary bills (other than Money Bills) can originate in either House of Parliament. They can be scrutinised, debated in and amended in both the Houses of Parliament during the course of 102 PART E passage. A Bill is not regarded as being passed by Parliament until both the Houses agree to its passage without amendments or with the amendments as proposed. A constitutional discretion is conferred on the Speaker of the Lok Sabha to decide whether a Bill is a Money Bill. When the Speaker of the Lok Sabha declares a Bill to be a Money Bill, the Rajya Sabha is left only with the option to make recommendations to the Bill within the deadline of fourteen days. Being only recommendations, they do not bind the Lok Sabha. They may either be accepted or rejected by the Lok Sabha. 60 The Rajya Sabha is a constitutional body in a bicameral legislature. The makers of the Constitution adopted bicameralism from Britain. The origin of the limited role that the Upper House has in the passing of a Money Bill can be traced to the British Parliament Act, 1911, which will be discussed in a subsequent part of this analysis. The draftspersons of the Constitution were conscious of the impact of a misuse of institutional power. They provided for a detailed blue print of the architecture of constitutional governance. It is necessary to understand our constitutional history in order to comprehend the scope of the finality attributed to the Speaker’s decision on whether or not a Bill is a Money Bill.
61 The origins of the procedure of passing Money Bills in the United Kingdom are older than the Parliament Act of 1911. The authoritative 103 PART E treatise73, by Thomas Erskine May, on the law, privileges, proceedings and usage of Parliament in Britain dwells on the history of the evolution of the relationship between the House of Commons and the House of Lords with regard to their powers of taxation and in relation to national revenue and public expenditure.74 A grant imposed by the House of Commons would become law in effect, only after the assent of the House of Lords and of the Queen.75 While the House of Commons enjoyed the legal right to originate grants for nearly 300 years, the House of Lords was originally not precluded from amending a Bill. But in 167176 and 167877 respectively, the Commons passed two resolutions to curtail the powers of the House of Lords so that only the Commons had the sole right to direct or limit the scope of a Bill regarding taxation and government expenditure. The House of Lords was excluded from altering any such Bill.
The exclusion of the Lords was so strictly followed that the Commons even denied to the former, the power of authorising the taking of fees, imposing 73 Thomas Erskine May, A treatise on the law, privileges, proceedings and usage of Parliament, Ninth Edition (1883) 74 Ibid, at pages 637-638. It notes: “At length, when the Commons had increased in political influence, and the subsidies voted by them had become the principal source of national revenue, they gradually assumed their present position in regard to taxation and supply, and included the Lords as well as themselves in their grants. So far back as 1407, it was stated by King Henry IV, in the ordinance called “The Indemnity of the Lords and Commons”, that grants were “granted by the Commons, and assented to by the Lords”.” 75 Ibid, at page 638 76 Ibid, at page 641. The Resolution stated: “That in all aids given to the king by the Commons, the rate or tax ought not to be altered”.
77 Ibid. The Resolution stated: “That all aids and supplies, and aids to his Majesty in Parliament, are the sole gift of the Commons ; and all bills for the granting of any such aids and supplies ought to begin with the Commons : and that it is the undoubted and sole right of the Commons to direct, limit, and appoint in such bills the ends, purposes, considerations, conditions, limitations, and qualifications of such grants ; which ought not to be changed or altered by the House of Lords.” 104 PART E pecuniary penalties or of varying the mode of suing for them, or of applying them when recovered, though such provisions were necessary to give effect to the general enactments of a Bill.78 Since this strict enforcement was found to be “attended with unnecessary inconvenience”, it led to the adopting of a Standing Order in 1849 which accommodated space to the House of Lords for suggesting amendments on legislative issues.79 However, the constitutional skirmishes continued. They eventually led to the passage of the Parliament Act of 1911, which essentially deprived the House of Lords of the right to reject Money Bills.
62 The Parliament Act 1911 was explicitly aimed at “regulating the relations between the two Houses of Parliament”80. The Preamble of the Act indicates that it was enacted for “restricting the existing powers of the House of Lords”81. Section 1(1) provides for the power of the House of Lords on Money Bills:
“If a Money Bill, having been passed by the House of Commons, and sent up to the House of Lords at least one month before the end of the session, is not passed by the House of Lords without amendment within one month after it is so sent up to that House, the Bill shall, unless the House of Commons direct to the contrary, be present to His Majesty and become an Act of Parliament on the Royal Assent being signified, notwithstanding that the House of Lords have not consented to the Bill.” “Money Bill” was defined statutorily for the first time. Section 1(2) provided:
78 Ibid, at pages 642-643 79 Ibid, pages 646-647 80 Preamble of the Parliament Act 1911 81 Ibid 105 PART E “A Money Bill means a Public Bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with all or any of the following subjects, namely, the imposition, repeal, remission, alteration, or regulation of taxation; the imposition for the payment of debt or other financial purposes of charges on the Consolidated Fund, [the National Loans Fund] or on money provided by Parliament, or the variation or repeal of any such charges; supply; the appropriation, receipt, custody, issue or audit of accounts of public money; the raising or guarantee of any loan or the repayment thereof; or subordinate matters incidental to those subjects or any of them. In this subsection the expressions “taxation”, “public money”, and “loan” respectively do not include any taxation, money, or loan raised by local authorities or bodies for local purposes.” The use of the expression “means” in the definition of a Money Bill indicates it was exhaustively defined. A Bill would be a Money Bill, if the Speaker of the House of Commons opined that it contains “only” certain specific provisions. Under Section 1(3), when a Money Bill is sent up to the House of Lords and to Her Majesty for assent, it should be endorsed by a certificate of the Speaker of the House of Commons that it is a Money Bill. This sub-section also provides that before giving his certificate, the Speaker may consult “two members to be appointed from the Chairman’s Panel at the beginning of each Session by the Committee of Selection”. Therefore, the Speaker has to certify any bill which in his or her opinion falls within the definition of a Money Bill. Any bill containing provisions outside the definition would not be certified as a Money Bill. The Speaker does not certify a Bill until it has reached the form in which it will leave the House of Commons, that is, at the end of its Commons 106 PART E stage. The Speaker can only decide whether or not to certify a Bill once it has passed the House.82 Section 3 of the 1911 Act provides finality to the certificate issued by the Speaker and renders it immune from judicial review. According to it:
“Any certificate of the Speaker of the House of Commons given under this Act shall be conclusive for all purposes, and shall not be questioned in any court of law.” (Emphasis supplied) The Act provides finality to the decision of the Speaker of the House of Commons. By using the phrase “shall not be questioned in any court of law”, the Act grants immunity to the Speaker’s decision from judicial review.
The statutory concept of a ‘Money Bill’ and the Speaker’s certification of a Bill as a ‘Money Bill’ introduced by the Parliament Act, 1911 ultimately found its way into the Constitution of India, but with significant modifications. 63 In India, the categorization of Money Bills can be said to have begun from the Commonwealth of India Bill 1925, which was drafted by a National Convention comprised of 250 members, with Tej Bahadur Sapru as its Chairman. Article 36 of the Commonwealth Bill provided:
“36. (a) Any Bill which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation.
82 House of Lords, Select Committee on the Constitution, Money Bills and Commons Financial Privilege (2011), available at https://publications.parliament.uk/pa/ld201011/ldselect/ldconst/97/97.pdf 107 PART E
(b) Bills imposing taxation· shall deal only with the imposition of taxes, and any provision therein dealing with any other matter shall be of no effect.
(c) Bills for the appropriation of revenues or moneys or imposing taxation shall be introduced only by a member of the Cabinet, and can only originate in the Legislative Assembly.” The Bill neither provided a definition of a Money Bill nor did it discuss the role of the Speaker of the Assembly of elected representatives. In its Madras session of December 1927, the Indian National Congress, as a response to the setting up of the Simon Commission (which did not have any Indian members) decided to set up an All Parties’ Conference to draft a Constitution for India. With Motilal Nehru as the Chairman of the Committee constituted by the All Parties’ Conference, a Report was prepared. Article 17 of the Nehru Report provided a definition of a Money Bill:
“17. A money bill means a bill which contains only provisions dealing with all or any of the following subjects, namely the imposition, repeal, remission, alteration or regulation of taxation; the imposition, for the payment of debt or other financial purposes, of charges on public revenues or monies, or the variation or repeal of any such charges; the supply, appropriation, receipt, custody, issue or audit of accounts of public money; the raising of any loan or the repayment thereof; or subordinate matters incidental to those subjects or any of them. In this definition the expression “taxation”, “public money” and “loan” respectively do not include any taxation, money or loan raised by local authorities or bodies for local purposes.” The definition of a Money Bill in the Nehru Report, was drawn from the Parliament Act, 1911 in Britain. Article 18 of the Report provided that the “question whether a bill is or is not a money bill will be decided by the 108 PART E president of the House of Representatives”. The House of Representatives (the Lower House) was provided the final authority to either accept or reject the recommendations made by the Senate (the Upper House). Article 19 of the Report provided thus:
“A money bill passed by the House of Representatives shall be sent to the Senate for its recommendations and it shall be returned not later than… days therefrom to the House of Representatives, which may pass it, accepting or rejecting all or any of the recommendations of the Senate; and the bill so passed shall be deemed to have been passed by both chambers.” While the Constituent Assembly of India was in session, the Socialist Party of India came up with a “Draft Constitution of the Republic of India”, based on its ideologies. Article 147 of its Draft Constitution provided:
“147. (1) A Bill making provision-
(a) for imposing, abolishing, remitting, altering or regulating any tax ; or
(b) for regulating the borrowing of money, or giving any guarantee by the Government, or for amending the law with respect to any financial obligations undertaken or to be undertaken by the Government; or
(c) for declaring any expenditure to be expenditure charged on the public revenues, or for increasing the amount of any such expenditure shall be deemed as a money Bill and shall not be introduced or moved except on the recommendation of the Government. (2) A Bill or amendment shall not be deemed to make provision for any of the purposes aforesaid by reason only that it provides for the Imposition of fines or other pecuniary penalties, or for the demand and payment of fees for licenses or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration, or regulation of tax by any local authority or body for local purposes.
(3) In case of dispute whether a Bill is a money Bill or not, the decision of the Speaker, or in his absence of the Deputy Speaker, shall be final.” 109 PART E The Draft Constitution of the Socialist Party conferred a discretion on the Speaker of the Lower House, and in his absence, on the Deputy Speaker, to decide whether a Bill is a Money Bill.
64 There was another model present before the makers of the Indian Constitution. British India was governed by the provisions of the Government of India Act, 1935, which provided for two Houses of Parliament − the Council of States (Upper House) and Federal Assembly (Lower House). Section 37 of the Government of India Act 1935 made special provisions for financial bills:
“37.-(1) A Bill or amendment making provision- (a) for imposing or increasing any tax; or (b) for regulating the borrowing of money or the giving of any guarantee by the Federal Government, or for amending the law with respect to any financial obligations undertaken or to be undertaken by the Federal Government ; or (c) for declaring any expenditure to be expenditure charged on the revenues of the Federation, or for increasing the amount of any such expenditure, shall not be introduced or moved except on the recommendation of the Governor-General, and a Bill making such provision shall not be introduced in the Council of State.” Under the 1935 Act, there was no provision for a Speaker’s certificate regarding a Financial Bill. Section 38(1) authorized each House to make rules regulating its procedure and for the conduct of its business, subject to the provisions of the Act.
A Financial Bill could be introduced only “on the recommendation of the Governor-General”. Section 41 provided a general immunity from judicial review on the “ground of any alleged irregularity of procedure”: 110 PART E “41(1). The validity of any proceedings in the Federal Legislature shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or other member of the Legislature in whom powers are vested by or under this Act for regulating procedure or the conduct of business, or for maintaining order, in the Legislature shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.” The Constituent Assembly evidently had these legislative precedents relating to Money Bills which it would have considered while formulating its drafts. 65 While the proceedings of the Constituent Assembly were in motion, Sir B N Rau, as its constitutional advisor, prepared a memorandum of the Draft Constitution for the Union Constitution Committee. It envisaged a Parliament of the Union consisting of the President and two Houses—the Senate and the House of Representatives.83 One of the proposals discussed in the meetings of the Union Constitution Committee was that “Money Bills would originate in the House of the People and the power of the other House would be limited to making suggestions for amendment, which the House of the People could accept or reject”.84 B Shiva Rao has recorded what transpired during the course of the proceedings of the Constituent Assembly:
“The Draft also included provisions regarding legislative procedure, procedure in financial matters and general procedure for the conduct of business. No Bill could be submitted for the President’s assent unless it had been passed in identical form by both Houses. Except in the case of Money Bills, both Houses enjoyed equal powers; and difference between the two Houses were to be settled by a majority vote in a joint sitting of both Houses convened by the President… Money Bills were defined in the Draft as 83 B Shiva Rao, The Framing of India’s Constitution: A Study, Indian Institution of Public Administration (1968), at page 420 84 Ibid 111 PART E comprising Bills proposing the imposition or increase of any tax, regulating the borrowing of money by the Government of India or the giving of financial guarantees, or declaring any item of expenditure as ‘‘charged” on the revenues, i.e. placing it outside the vote of the House of the People. The general principle approved by the Constituent Assembly was that financial control over the executive would' be - exercised by the House of the People. Accordingly the Draft provided that Money Bills could originate only in that House. The powers of the Council of States in the case of Money Bills were restricted to making suggestions for amendment. If these suggestions were, not accepted by the House of the People, or if the Council of States did not return a Bill within thirty days with its suggestions for amendment, the Bill would be ‘deemed to have been' passed by both Houses in the form in which it was passed' by the House of the People” and submitted to the President for his assent’.”85 66 The draft prepared by the Constitutional Advisor provided a definition of a Money Bill, which was inspired by Section 37 of the Government of India Act 1935, Section 53 of the Commonwealth of Australia Constitution Act 190086 and Article 22 of the Constitution of Ireland 1937.87 Article 75 of this draft of the Constitution provided that “if any question arises whether a Bill is a ‘money bill’ or not, the decision of the Speaker of the House of the People thereon shall be final.”88 Neither Section 37 of the Government of India Act 1935 nor Section 53 of the Commonwealth of Australia Constitution Act 1900 85 Ibid, at pages 427-428 86 The said provision provides: “Powers of the Houses in respect of legislation.
Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law. The Senate may not amend proposed laws imposing taxation, or proposed laws appropriating revenue or moneys for the ordinary annual services of the Government. The Senate may not amend any proposed law so as to increase any proposed charge or burden on the people. The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein. And the House of Representatives may, if it thinks fit, make any of such omissions or amendments, with or without modifications. Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.” 87 B Shiva Rao, The Framing of India’s Constitution: Selected Documents, Indian Institution of Public Administration (2012), at page 32, as quoted in Pratik Datta, Shefali Malhotra & Shivangi Tyagi, Judicial Review and Money Bills, NUJS Law Review (2017) 88 Ibid 112 PART E has a similar provision which accords legal finality to the decision of the Speaker. The draft provision was similar to Article 22 of the Constitution of Ireland 1937, which provides:
“1. The Chairman of Dáil Éireann89 shall certify any Bill which, in his opinion, is a Money Bill to be a Money Bill, and his certificate shall, subject to the subsequent provisions of this section, be final and conclusive.
2. Seanad Éireann90, by a resolution, passed at a sitting at which not less than thirty members are present, may request the President to refer the question whether the Bill is or is not a Money Bill to a Committee of Privileges.
3. If the President after consultation with the Council of State decides to accede to the request he shall appoint a Committee of Privileges consisting of an equal number of members of Dáil Éireann and of Seanad Éireann and a Chairman who shall be a Judge of the Supreme Court: these appointments shall be made after consultation with the Council of State. In the case of an equality of votes but not otherwise the Chairman shall be entitled to vote.
4. The President shall refer the question to the Committee of Privileges so appointed and the Committee shall report its decision thereon to the President within twenty-one days after the day on which the Bill was sent to Seanad Éireann.
5. The decision of the Committee shall be final and conclusive.
6. If the President after consultation with the Council of State decides not to accede to the request of Seanad Éireann, or if the Committee of Privileges fails to report within the time hereinbefore specified the certificate of the Chairman of Dáil Éireann shall stand confirmed.” (Emphasis supplied) 67 The draft prepared by the Advisor to the Constituent Assembly did not adopt the above provision in its entirety. It adopted the part on the finality of the certification of the Speaker on whether a Bill is a Money Bill. The Irish model of dispute resolution, which provided for a mechanism to review the Speaker’s certification, was not adopted. 89 Lower House in Ireland 90 Upper House in Ireland 113 PART E Subsequently, in its report submitted to the President of the Constituent Assembly on 5 December 1947, the Expert Committee on Financial Provisions suggested an amendment to the draft provision, to the effect that:
“When a Money Bill is sent from the Lower House to the Upper, a certificate of the Speaker of the Lower House saying that it is a Money Bill should be attached to, or endorsed on, the bill and a provision to that effect should be made in the Constitution on the lines of the corresponding provision in the Parliament Act, 1911. This will prevent controversies about the matter outside the Lower House.”91 (Emphasis supplied) Certification of any Bill by the Speaker of the Lower House as a Money Bill, was envisaged for procedural simplicity to avoid causing confusion in the Upper House of Parliament.
68 The final provision which has assumed the form of Article 110 of the Constitution, does not contain the exact language used in the Act of 1911. The 1911 Act of the British Parliament consciously excluded judicial review of the certificate of the Speaker of the House of Commons. The intention of the British Parliament is clear from the specific language used in Section 3 of the Act. Section 3 accords finality to the decision of the Speaker by providing that any certificate of the Speaker of the House of Commons “shall be conclusive for all purposes, and shall not be questioned in any court of law”. The certification of the Speaker is both conclusive and immune from judicial review. The framers of the Indian Constitution did not adopt this language. 91 B Shiva Rao, The Framing of India’s Constitution: Selected Documents, Indian Institution of Public Administration, at page 281 114 PART E Rather, they chose to adopt the phrase “shall be final”. The phrase used in the Act of 1911 expressly excluded courts from exercising their power of judicial review over the decision of the Speaker of the House of Commons. This language was used in the 1911 Act to put an end to the constitutional skirmishes experienced by the House of Lords and the House of Commons in Britain for more than five hundred years, leading to the enactment of the 1911 Act.92 The deviation from incorporating the language, used in the 1911 Act, into the Indian Constitution is reflective of the intention of our Constitution makers that they did not want to confer the same status on the power assigned to the Speaker of the Lok Sabha, as is provided to the Speaker of the House of Commons. Had their intention been otherwise, they would have used the same language as that provided under the 1911 Act. Finality would operate as between the Houses of Parliament. It did not exclude judicial review by a constitutional Court.
69 The British legal system adopts the principle of parliamentary sovereignty. That is not so in India. Ours is a system founded on the supremacy of the Constitution. Judicial review is an essential component of constitutional supremacy. A Constitution Bench of this Court in Kalpana Mehta v Union of India93 has, while noticing this distinction, held:
“…The fundamental difference between the two systems lies in the fact that parliamentary sovereignty in the Westminster form of government in the UK has given way, in the Indian Constitution, to constitutional supremacy. Constitutional 92 Pratik Datta, Shefali Malhotra & Shivangi Tyagi, Judicial Review and Money Bills, NUJS Law Review (2017) 93 (2018) 7 SCC 1 115 PART E supremacy mandates that every institution of governance is subject to the norms embodied in the constitutional text. The Constitution does not allow for the existence of absolute power in the institutions which it creates. Judicial review as a part of the basic features of the Constitution is intended to ensure that every institution acts within its bounds and limits.”94 70 The purpose of judicial review is to ensure that constitutional principles prevail in interpretation and governance. Institutions created by the Constitution are subject to its norms. No constitutional institution wields absolute power. No immunity has been attached to the certificate of the Speaker of the Lok Sabha from judicial review, for this reason. The Constitution makers have envisaged a role for the judiciary as the expounder of the Constitution. The provisions relating to the judiciary, particularly those regarding the power of judicial review, were framed, as Granville Austin observed, with “idealism”95. Courts of the country are expected to function as guardians of the Constitution and its values. Constitutional courts have been entrusted with the duty to scrutinize the exercise of power by public functionaries under the Constitution. No individual holding an institutional office created by the Constitution can act contrary to constitutional parameters. Judicial review protects the principles and the spirit of the Constitution. Judicial review is intended as a check against arbitrary conduct of individuals holding constitutional posts. It holds public functionaries accountable to constitutional duties. If our Constitution has to survive the vicissitudes of political aggrandisement and to face up to the prevailing 94 Ibid, at para 227 95 Granville Austin, The Indian Constitution: Cornerstone of a Nation, Oxford University Press (1966), at page 205 116 PART E cynicism about all constitutional institutions, notions of power and authority must give way to duties and compliance with the rule of law. Constitutional institutions cannot be seen as focal points for the accumulation of power and privilege. They are held in trust by all those who occupy them for the moment.
The impermanence of power is a sombre reflection for those who occupy constitutional offices. The Constitution does not contemplate a debasement of the institutions which it creates. The office of the Speaker of the House of People, can be no exception. The decision of the Speaker of the Lok Sabha in certifying a Bill as a Money Bill is liable to be tested upon the touchstone of its compliance with constitutional principles. Nor can such a decision of the Speaker take leave of constitutional morality. 71 Our Constitution does not provide absolute power to any institution. It sets the limits for each institution. Our constitutional scheme envisages a system of checks and balances. The power of the Speaker of the Lok Sabha, to decide whether a Bill is a Money Bill, cannot be untrammelled. The contention that the decision of Speaker is immune from judicial review and cannot be questioned, is contrary to the entire scheme of the Constitution, which is premised on transparency, non-arbitrariness and fairness. The phrase “shall be final” used in Article 110(3) has been adopted, as mentioned earlier, from Article 22 of the Irish Constitution. The provisions of Article 22 of the Irish Constitution provide a mechanism for review of the certificate issued by the Speaker. Recourse is provided under the Irish Constitution by which 117 PART E the members of the Upper House of the Irish Parliament can request the President of Ireland to refer the question of whether a Bill is a Money Bill, to a Committee of Privileges. If the President refers the question to this Committee, the decision of the Committee stands “final and conclusive”. The members of the Constituent Assembly did not adopt this mechanism. Absence of this mechanism does not mean that the decision of the Speaker of the Lok Sabha cannot be subject to checks and balances, of which judicial review is an indispensable facet. The Speaker has to act within the domain, which the Constitution accords to the office of the Speaker. The power conferred on the Speaker of the Lok Sabha cannot be exercised arbitrarily, for it could damage the scheme of the Constitution. Judicial review is the ultimate remedy to ensure that the Speaker does not act beyond constitutional entrustment. 72 The scope of the phrase “shall be final” can also be understood by looking at the proceedings of the Constituent Assembly. The constitutional foundation of Article 110(4) is based upon a suggestion of the Expert Committee on Financial Provisions that when a Money Bill is transmitted from the Lower House to the Upper House, it should be endorsed by the Speaker’s certificate, so as to prevent any controversy “about the matter outside the Lower House”. Therefore, the finality provided to the decision of the Speaker as to whether a Bill is a Money Bill or not, is aimed at avoiding any controversy on the issue in the Rajya Sabha and before the President. Had it been intended to prevent the court from adjudicating upon the validity of the 118 PART E decision of the Speaker, the language of the Article would have made it explicit. Where a constitutional provision evinces a specific intent to exclude judicial review, clear words to that effect are used. Articles 243O(a) 96, 243ZG(a)97 and 329(a) specifically use the phrase − “shall not be called in question in any court”. For instance, Article 329(a) provides thus:
“Notwithstanding anything in this Constitution —
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 327 or article 328, shall not be called in question in any court.” (Emphasis supplied) 73 In N P Ponnuswami v Returning Officer, Namakkal Constituency, Namakkal, Salem District98, a six judge Bench of this Court, while construing the provisions of Article 329, compared it to the preceding Articles, and held thus:
“5…A notable difference in the language used in articles 327 and 328 on the one hand, and article 329 on the other, is that while the first two articles begin with the words “subject to the provisions of this Constitution”, the last article begins with the words “notwithstanding anything in this Constitution”. It was conceded at the Bar that the effect of this difference in language is that whereas any law made by Parliament under article 327, or by the State Legislature under article 328, cannot exclude the jurisdiction of the High Court under article 226 of the Constitution, that jurisdiction is excluded in regard to matters provided for in article 329.”99 96 Article 243O(a), which is a part of the chapter on Panchayats, provides: “Notwithstanding anything in this Constitution,— (a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243K, shall not be called in question in any court.” 97 Article 243ZG(a), which is a part of the chapter on Municipalities, provides: “Notwithstanding anything in this Constitution,— (a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243ZA shall not be called in question in any court.” 98 1952 SCR 218 99 Ibid, at para 5 119 PART E 74 In order to understand the scope of the finality attached to the Speaker’s decision under Article 110(3), it would be useful to analyse how in the case of other constitutional provisions, the words “shall be final” have been interpreted by this Court. Articles 217(3)100, 311(3)101 and paragraph 6(1) of the Tenth Schedule102 contain the phrase “shall be final”. In Union of India v Jyoti Prakash Mitter103, this Court held that it can examine the legality of an order passed by the President on the determination of the age of a Judge of the High Court under Article 217 (3) of the Constitution. The six judge Bench held:
“32…The President acting under Article 217(3) performs a judicial function of grave importance under the scheme of our Constitution. He cannot act on the advice of his Ministers.
Notwithstanding the declared finality of the order of the President the Court has jurisdiction in appropriate cases to set aside the order, if it appears that it was passed on collateral considerations or the rules of natural justice were not observed, or that the President's judgment was coloured by the advice or representation made by the executive or it was founded on no evidence…Appreciation of evidence is entirely left to the President and it is not for the Courts to hold that on the evidence placed before the President on which the conclusion is founded, if they were called upon to decide the case they would have reached some other conclusion.”104 The President was held to perform a judicial function in making a determination under Article 217(3).
100 Article 217 (3) states: “If any question arises as to the age of a Judge of a High Court, the question shall be decided by the President after consultation with the Chief Justice of India and the decision of the President shall be final.” 101 Article 311(3) states: “If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final.” 102 Paragraph 6(1) states “If any question arises as to whether a member of a House has become subject to disqualification under this Schedule, the question shall be referred for the decision of the Chairman, or, as the case may be, the Speaker of such House and his decision shall be final: Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final.” 103 (1971) 1 SCC 396 104 Ibid, at page 397 120 PART E The question of finality under Article 311(3) was dealt with by a Constitution Bench of this Court in Union of India v Tulsiram Patel105. The Court held that the finality given to the decision of the disciplinary authority by Article 311(3) that it is not reasonably practicable to hold an enquiry, is not binding upon the Court so far as its power of judicial review is concerned. The constitutional validity of the provisions contained in the Tenth Schedule to the Constitution came up for consideration before a Constitution Bench of this Court in Kihoto Hollohan v Zachillhu106. The Constitution Bench held that the power vested in the Speaker or the Chairman under the Schedule, is a judicial power, and was amenable to judicial review:
“111…That Paragraph 6(1) of the Tenth Schedule, to the extent it seeks to impart finality to the decision of the Speakers/Chairmen is valid. But the concept of statutory finality embodied in Paragraph 6(1) does not detract from or abrogate judicial review under Articles 136, 226 and 227 of the Constitution in so far as infirmities based on violations of constitutional mandates, mala fides, non-
compliance with Rules of Natural Justice and perversity, are concerned.”107 (Emphasis supplied) The Bench had also clarified that:
“101…The principle that is applied by the courts is that in spite of a finality clause it is open to the court to examine whether the action of the authority under challenge is ultra vires the powers conferred on the said authority. Such an action can be ultra vires for the reason that it is in contravention of a mandatory provision of the law conferring on the authority the power to take such an action. It will also be ultra vires the powers conferred on the authority if it is 105 (1985) 3 SCC 398 106 (1992) Supp (2) SCC 651 107 Ibid, at page 711 121 PART E vitiated by mala fides or is colourable exercise of power based on extraneous and irrelevant considerations...”108 Undoubtedly, the finality clauses contained in Article 217(3), 311(3) and in paragraph 6(1) of the Tenth Schedule were held not to exclude judicial review since the essential nature of the power is judicial. A constitutional function is entrusted to the Speaker to certify a Bill as a Money Bill under Article 110(3), to which the attributes of a judicial power do not apply. Indeed, the power which is entrusted to the Speaker under Article 110(3) is integral to the legislative process. But, the fact that the authority which a constitutional functionary exercises is not of a judicial character, is not sufficient to lead to the conclusion that a finality clause governing the exercise of that power makes it immune from judicial review. Where the entrustment of the power is subject to the due fulfilment of constitutional norms, the exercise of jurisdiction is amenable to judicial review, to the extent necessary to determine whether there has been a violation of a constitutional mandate. The nature and extent of judicial review would undoubtedly vary from a situation where finality has been attached to a judicial, administrative or quasi-judicial power. However, a clause on finality notwithstanding, it is open to the constitutional court to determine as to whether there has been a violation of a constitutional mandate as a result of which the decision suffers from a constitutional infirmity. The entrustment of a constitutional function to the Speaker under Article 110(3) to certify a Bill as a Money Bill is premised on the fulfilment of the norms stipulated in Article 110(1). A certification can be questioned on the ground 108 Ibid, at page 708 122 PART E that the Bill did not fulfil the conditions stipulated in Article 110(1) to be designated as a Money Bill. If that is established, the certification would be contrary to constitutional mandate. Whether that is so can be judicially scrutinized.
75 The notion that an entrustment of power is absolute has a colonial origin. Law under a colonial regime was not just an instrument to maintain order but was a source of subordination. Recognition of the vesting of absolute authority was but a reflection of the premise that those who ruled could not be questioned. Those who were ruled had to accept the authority of the ruler. Nothing can be as divorced from constitutional principle as these normative foundations of colonial law and history. The notion that power is absolute is inconsistent with a Constitution which subjects the entrustment of functions to public functionaries to the restraints which accompany it. Our law must recognise the need to liberate its founding principles from its colonial past. The Court should not readily accept the notion that the authority vested in a constitutional functionary is immune from judicial review. In the absence of a specific exclusion of judicial review, none can be implied. Moreover, any exclusion of judicial review must be tested on the anvil of its functionality. A specific exclusion of judicial review, in order to be valid, must serve a constitutional function. The test of functionality must relate to whether an exclusion of review is necessary to fulfil the overarching need for the proper discharge of a constitutional role. Exclusion of review, to be valid, must fulfil 123 PART E the requirement of a constitutional necessity. Its purpose cannot be to shield an excess of power from being questioned before the Court. Nor is the fact that a power is vested in a high functionary a ground to shield it from scrutiny. The ultimate test is whether the exclusion of judicial review is express and specific and, whether such an exclusion is designed to achieve a constitutional purpose that meets the test of functionality, assessed in terms of a constitutional necessity. In the seventh decade of the republic, our interpretation of the Constitution must subserve the need to liberate it from its colonial detritus.
This approach was adopted by a seven judge Bench of this Court in Krishna Kumar Singh v State of Bihar109. While interpreting the ordinance making power of the Governor, the Court held that the interpretation of the Constitution must be “carefully structured” to ensure that the power remains what the framers of our Constitution intended it to be. The Bench held:
“91…The issue which needs elaboration is whether an ordinance which by its very nature has a limited life can bring about consequences for the future (in terms of the creation of rights, privileges, liabilities and obligations) which will enure beyond the life of the ordinance. In deciding this issue, the court must adopt an interpretation which furthers the basic constitutional premise of legislative control over ordinances. The preservation of this constitutional value is necessary for parliamentary democracy to survive on the sure foundation of the Rule of law and collective responsibility of the executive to the legislature. The silences of the Constitution must be imbued with substantive content by infusing them with a meaning which enhances the Rule of law. To attribute to the executive as an incident of the power to frame ordinances, an unrestricted ability to create binding effects for posterity would 109 (2017) 3 SCC 1 124 PART E set a dangerous precedent in a parliamentary democracy.
The court's interpretation of the power to frame ordinances, which originates in the executive arm of government, cannot be oblivious to the basic notion that the primary form of law making power is through the legislature...”110 (Emphasis supplied) The ordinance making power was held to be an exceptional power to meet a “constitutional necessity”.
76 The marginal note to Article 122 is: “Courts not to inquire into proceedings of Parliament”. The Article reads thus:
“122. (1) The validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.” This Court must deal with the question whether the Speaker’s decision under Article 110(3) is protected by Article 122. Article 122 prohibits courts from examining the validity of any proceedings in Parliament on the ground that there was “any alleged irregularity of procedure”. The content of the expression “procedure” referred to in the Article, is indicated in Article 118 of the Constitution. The marginal note to Article 118 provides for “Rules of procedure”. Article 118 provides as follows:
“118. (1) Each House of Parliament may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business.
(2) Until rules are made under clause (1), the rules of 110 Ibid, at pages 76-77 125 PART E procedure and standing orders in force immediately before the commencement of this Constitution with respect to the Legislature of the Dominion of India shall have effect in relation to Parliament subject to such modifications and adaptations as may be made therein by the Chairman of the Council of States or the Speaker of the House of the People, as the case may be.
(3) The President, after consultation with the Chairman of the Council of States and the Speaker of the House of the People, may make rules as to the procedure with respect to joint sittings of, and communications between, the two Houses.
(4) At a joint sitting of the two Houses the Speaker of the House of the People, or in his absence such person as may be determined by rules of procedure made under clause (3), shall preside.” (Emphasis supplied) 77 Articles 118 to 122 are covered under the rubric of the general heading- “Procedure Generally”. Article 118 provides for rules to be made by each House of Parliament for regulating the procedure and conduct of its business. The Article subjects these contemplated rules to the provisions of the Constitution. The provision does not indicate that these rules will stand above the Constitution. They are, on the contrary, subject to the Constitution. The rules framed under Article 118, are procedural in nature. The procedure contemplated under Articles 118 to 122 is distinct from substantive constitutional requirements. The obligation placed on the Speaker of the Lok Sabha to certify whether a Bill is a Money Bill is not a mere matter of “procedure” contemplated under Article 122. It is a constitutional requirement, which has to be fulfilled according to the norms set out in Article 110. Article 122 will not save the action of the Speaker, if it is contrary to constitutional norms provided under Article 110. The Court, in the exercise of its power of judicial review, can adjudicate upon the validity of the action of the Speaker if 126 PART E it causes constitutional infirmities. Article 122 does not envisage exemption from judicial review, if there has been a constitutional infirmity. The Constitution does not endorse a complete prohibition of judicial review under Article 122. It is only limited to an “irregularity of procedure”. 78 This Court has on several occasions restricted the scope of the bar provided under Article 122 (and under corresponding Article 212 for the States) and has distinguished an “irregularity of procedure” from “illegality”. In Special Reference No. 1 of 1964111, a seven judge Bench of this Court brought home that distinction in the context of Article 212(1) with the following observations:
“61…Article 212(2) confers immunity on the officers and members of the Legislature in whom powers are vested by or under the Constitution for regulating procedure or the conduct of business, or for maintaining order, in the Legislature from being subject to the jurisdiction of any court in respect of the exercise by him of those powers. Art. 212(1) seems to make it possible for a citizen to call in question in the appropriate court of law the validity of any proceedings inside the legislative chamber if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinised in a court of law, though such scrutiny is prohibited if the complaint against the procedure is no more than this that the procedure was irregular...” (Emphasis supplied) In Ramdas Athawale v Union of India112 (“Ramdas Athawale”), a Constitution Bench of this Court extended the above formulation to Article 122 of the Constitution:
111 AIR 1965 SC 745 112 (2010) 4 SCC 1 127 PART E “36.This Court Under Article 143, Constitution of India, In re (Special Reference No. 1 of 1964) [AIR 1965 SC 745 : (1965) 1 SCR 413] (also known as Keshav Singh case [AIR 1965 SC 745 : (1965) 1 SCR 413] ) while construing Article 212(1) observed that it may be possible for a citizen to call in question in the appropriate Court of law, the validity of any proceedings inside the Legislature if his case is that the said proceedings suffer not from mere irregularity of procedure, but from an illegality. If the impugned procedure is illegal and unconstitutional, it would be open to be scrutinized in a Court of law, though such scrutiny is prohibited if the complaint against the procedure is no more than this that the procedure was irregular. The same principle would equally be applicable in the matter of interpretation of Article 122 of the Constitution.”113 A Constitution Bench of this Court reaffirmed the distinction between a “procedural irregularity” and an “illegality” in Raja Ram Pal v Hon'ble Speaker, Lok Sabha114 (“Raja Ram Pal”). The Bench held that courts are not prohibited from exercising their power of judicial review to examine any illegality or unconstitutionality in the procedure of Parliament:
“386…Any attempt to read a limitation into Article 122 so as to restrict the court's jurisdiction to examination of the Parliament's procedure in case of unconstitutionality, as opposed to illegality would amount to doing violence to the constitutional text. Applying the principle of “expressio unius est exclusio alterius” (whatever has not been included has by implication been excluded), it is plain and clear that prohibition against examination on the touchstone of "irregularity of procedure" does not make taboo judicial review on findings of illegality or unconstitutionality…115 398… the Court will decline to interfere if the grievance brought before it is restricted to allegations of “irregularity of procedure”. But in case gross illegality or violation of constitutional provisions is shown, the judicial review will not be inhibited in any manner by Article 122, or for that matter by Article 105.”116 113 Ibid, at pages 13-14 114 (2007) 3 SCC 184 115 Ibid, at page 359 116 Ibid, at page 362 128 PART E The Court distinguished the constitutional background in India from that of England, holding that while England has adopted a regime of exclusive parliamentary dominance, India is governed by a system of checks and balances provided in the Constitution:
“366.The touchstone upon which Parliamentary actions within the four-walls of the Legislature were examined was both the constitutional as well as substantive law. The proceedings which may be tainted on account of substantive illegality or unconstitutionality, as opposed to those suffering from mere irregularity thus cannot be held protected from judicial scrutiny by Article 122(1) in as much as the broad principle laid down in Bradlaugh [(1884) 12 QBD 271] acknowledging exclusive cognizance of the Legislature in England has no application to the system of governance provided by our Constitution wherein no organ is sovereign and each organ is amenable to constitutional checks and controls, in which scheme of things, this Court is entrusted with the duty to be watchdog of and guarantor of the Constitution.”117 (Emphasis supplied) The principle which emerges from these decisions is that the decision of the Speaker is amenable to judicial review, if it suffers from illegality or from a violation of constitutional provisions.
79 The Attorney General advanced the submission that this Court has on previous occasions refrained from scrutinizing the decision of the Speaker on whether a Bill is a Money Bill. Those decisions require discussion for adjudicating the present case. In Mangalore Ganesh Beedi Works v State of Mysore118 (“Mangalore Beedi”), a new system of coinage was introduced by amending the Indian Coinage Act. Under the new system, while one rupee 117 Ibid, at page<PHONE_NUMBER> Supp (1) SCR 275 129 PART E was divided into a hundred naya paisas, the old legal tender of sixteen annas or sixty four pice remained legal tender equivalent to one hundred naya paisas. The appellant, which was a firm registered under the Mysore Sales Tax Act, had to pay an additional amount as sales tax due to change in the currency. It was argued that by the substitution of 2 naya paisas (the new currency) in place of 3 pies (the old currency) as tax, there was a change in the tax imposed by the Mysore Sales Tax Act, which could only have been done by passing a Money Bill under Articles 198, 199 and 207 of the Constitution and since no Money Bill was introduced or passed for the enhancement of the tax, the tax was illegal and invalid. The contention, therefore, was that the procedure envisaged for passing a Money Bill ought to have been, but was not, followed. The Constitution Bench dismissed the appeal, holding that the substitution of a new coinage i.e. naya paisas in place of annas, pice and pies did not amount to an enhancement of tax. It was held to be merely a substitution of one coinage by another of equivalent value. This Court held that the levy of tax in terms of naya paisas was not unconstitutional nor was it a taxing measure but it dealt merely with the conversion of the old coinage into new coinage. Having held this, the Bench also remarked:
“5…Even assuming that it is a taxing measure its validity cannot be challenged on the ground that it offends Arts. 197 to 199 and the procedure laid down in Art. 202 of the Constitution. Article 212 prohibits the validity of any proceedings in a legislature of a State from being called in question on the ground of any alleged irregularity of procedure and Art. 255 lays down that requirements as to recommendation and previous sanction are to be regarded as matters of procedure only...” 130 PART E The Court having found that a substitution of coinage did not result in an enhancement of tax, Article 199 was not attracted. The legislative measure was not a Money Bill. Once that was the case, the subsequent observations (extracted above) proceeded on an assumption: that even if it were a taxing measure, it would be saved by Article 255. The court having held that no enhancement of tax was involved in a mere substitution of coinage, the alternative hypothesis is not a part of the ratio and was unnecessary. The ratio was that substitution of a new coinage did not amount to a Money Bill. The decision of the Constitution Bench in Mangalore Beedi dealt with the contention that a Money Bill was unconstitutionally passed as an ordinary Bill.
The Bench held that substitution of coinage did not make it a Money Bill. The decision contains a general observation regarding the immunity of proceedings in a state legislature. A scholarly article119 has correctly referred to the general remarks made in Mangalore Beedi as unnecessary and not the ratio since the issue was already decided on merits, by holding that the substitution of coinage was not an enhancement of tax.
80 A three judge Bench of this Court in Mohd Saeed Siddiqui v State of Uttar Pradesh120 (“Mohd Saeed Siddiqui”) dealt with the constitutional validity of the Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Act, 2012. Section 5(1) of the unamended Act provided a term of six years for the Lokayukta. Section 5(3) provided that on ceasing to hold office, the Lokayukta 119 Pratik Datta, Shefali Malhotra & Shivangi Tyagi, Judicial Review and Money Bills, Vol 10, NUJS Law Review (2017).
120 (2014) 11 SCC 415 131 PART E or Up-Lokayukta shall be ineligible for further appointment. The new State government, which came in office, introduced a Bill which was passed as the Uttar Pradesh Lokayukta and Up-Lokayuktas (Amendment) Act, 2012, by which the term of the U.P. Lokayukta and Up-Lokayukta was extended from six years to eight years or till the successor enters upon office. The Amendment Act also limited the ineligibility of the Lokayuktas or Up- Lokayuktas for further appointment under the Government of Uttar Pradesh. The Amendment Act was challenged on the ground that it was passed as a Money Bill when, on the face of it, it could never have been called a Money Bill under Article 199 of the Constitution. The Bench rejected the petition holding that the question “whether a Bill is a Money Bill or not can be raised only in the State Legislative Assembly by a member thereof when the Bill is pending in the State Legislature and before it becomes an Act”. It relied upon the observations made in Mangalore Beedi, to formulate following principles:
“(i) the validity of an Act cannot be challenged on the ground that it offends Articles 197 to 199 and the procedure laid down in Article 202; (ii) Article 212 prohibits the validity of any proceedings in a Legislature of a State from being called in question on the ground of any alleged irregularity of procedure; and (iii) Article 255 lays down that the requirements as to recommendation and previous sanction are to be regarded as a matter of procedure only. It is further held that the validity of the proceedings inside the Legislature of a State cannot be called in question on the allegation that the procedure laid down by the law has not been strictly followed and that no Court can go into those questions which are within the special jurisdiction of the Legislature itself, which has the power to conduct its own business.” 132 PART E The judgment also made a reference to the seven judge Bench decision in Pandit MSM Sharma v Dr Shree Krishna Sinha121 (“MSM Sharma”).
The “proceedings of the Legislature” were held to include “everything said or done in either House” in the transaction of parliamentary business. Relying upon Articles 212 and 255, the Bench accorded finality to the decision of the Speaker:
“43. As discussed above, the decision of the Speaker of the Legislative Assembly that the Bill in question was a Money Bill is final and the said decision cannot be disputed nor can the procedure of the State Legislature be questioned by virtue of Article 212. Further, as noted earlier, Article 255 also shows that under the Constitution the matters of procedure do not render invalid an Act to which assent has been given to by the President or the Governor, as the case may be.
Inasmuch as the Bill in question was a Money Bill, the contrary contention by the Petitioner against the passing of the said Bill by the Legislative Assembly alone is unacceptable.”122 Making a passing reference to the decision of the Constitution Bench in Raja Ram Pal, the Bench opined that even if it is established that there was some infirmity in the procedure in the enactment of the Amendment Act, it will be protected by Article 255 of the Constitution. 81 Subsequently, a two judge Bench of this Court in Yogendra Kumar Jaiswal v State of Bihar123 (“Yogendra Kumar”) dealt with the constitutional validity of the Orissa Special Courts Act, 2006. The law was enacted by the 121 AIR 1960 SC 1186 122 Mohd Saeed Siddiqui, Ibid, at page 430 123 (2016) 3 SCC 183 133 PART E State legislature, keeping in view the accumulation of properties disproportionate to their known sources of income by persons who have held or hold high political and public offices. The legislature provided special courts for speedy trial of certain classes of offences and for confiscation of properties. The appellants, who were public servants and facing criminal cases, challenged the Act on the ground that it was introduced in the State Assembly as a Money Bill though it did not have any characteristics of a Money Bill under Article 199 of the Constitution. The Court dismissed the petitions, following the decision in Mohd Saeed Siddiqui. It held that:
“43. In our considered opinion, the authorities cited by the learned Counsel for the Appellants do not render much assistance, for the introduction of a bill, as has been held in Mohd. Saeed Siddiqui (supra), comes within the concept of “irregularity” and it does come with the realm of substantiality.
What has been held in the Special Reference No. 1 of 1964 (supra) has to be appositely understood. The factual matrix therein was totally different than the case at hand as we find that the present controversy is wholly covered by the pronouncement in Mohd. Saeed Siddiqui (supra) and hence, we unhesitatingly hold that there is no merit in the submission so assiduously urged by the learned Counsel for the Appellants.”124 Special Reference No. 1 of 1964 was distinguished in Yogendra Kumar. Article 255 provides:
“No Act of Parliament or of the Legislature of a State, and no provision in any such Act, shall be invalid by reason only that some recommendation or previous sanction required by this Constitution was not given, if assent to that Act was given—
(a) where the recommendation required was that of the Governor, either by the Governor or by the President;
(b) where the recommendation required was that of the Rajpramukh, either by the Rajpramukh or by the President;
124 Ibid, at page 229 134 PART E
(c) where the recommendation or previous sanction required was that of the President, by the President.” 82 Article 255 speaks about a situation where a “recommendation or previous sanction” is required to be given by the Governor, Rajpramukh or, as the case may be, by the President. The absence of a recommendation or previous sanction will not invalidate the law, where the Act has received the assent of the Governor or the President. Subsequent assent, in other words, cures the absence of recommendation or sanction. Article 255 is in no way related to the decision or certificate of the Speaker of the Lok Sabha or of the State Legislative Assembly on whether a Bill is a Money Bill. Moreover, Article 255 does not apply to Articles 110 for the simple reason that the latter does not embody either a previous sanction or recommendation. Article 255 does not envisage superseding the role of the Upper House of Parliament or the State Legislature. Mohd Saeed Siddiqui proceeds on an erroneous understanding of Article 255. Mohd Saeed Siddiqui was followed in Yogendra Kumar. These two judgments cite the same three articles — Articles 199,125 212,126 and 255, to refrain from questioning the conduct of the Speaker, without noticing that Article 255 does not apply there. Further, MSM Sharma, which was referred in Mohd Saeed Siddiqui was discussed in the Special Reference to hold that the validity of any proceedings in a legislative chamber can be questioned if such proceedings 125 Corresponding provision for the Union is Article 110 of the Constitution. 126 Corresponding provision for the Union is Article 122 of the Constitution. 135 PART E suffer from illegality. The consistent thread which emerges from the judgments in Special Reference, Ramdas Athawale and Raja Ram Pal is that the validity of proceedings in Parliament or a State Legislature can be subject to judicial review on the ground that there is an illegality or a constitutional violation. Moreover, the judgment in Yogendra Kumar followed Mohd Saeed Siddiqui. Siddiqui was based on an erroneous understanding of Mangalore Beedi. The decision of the Speaker under Articles 110(3) and 199(3) is not immune from judicial review.
The three judge Bench decision in Mohd Saeed Siddiqui and the two judge Bench decision in Yogendra Kumar are overruled. 83 Barring judicial review of the Lok Sabha Speaker’s decision would render a certification of a Bill as a Money Bill immune from scrutiny, even where the Bill does not, objectively speaking, deal only with the provisions set out in Article 110(1). The decision of the Speaker of the Lok Sabha whether a Bill is a Money Bill impacts directly upon the constitutional role which will be discharged by the Rajya Sabha in relation to it. The Lok Sabha alone does not represent Parliament. The Indian Parliament is bicameral. The Constitution envisages a special role for the Rajya Sabha. In order to truly understand the relevance of the Rajya Sabha in the Indian context, an analysis of major bicameral systems is necessary, as an exercise in comparative law. 136 PART E 84 Bicameral legislatures are not unique to either the Presidential or Parliamentary forms of government. Democracies with a Presidential form of government have adopted bicameral legislatures, the United States being the leading example. Among Parliamentary democracies, India and the UK have adopted bicameral legislatures. They are predominant in federal countries. Where second chambers exist, they vary in terms of powers and composition. Together, their powers and composition shape the impact that they have on legislation.127 The phenomenon of the bicameral system has two different historic origins. It was first established in England, and later in the US.128 Both these models have been replicated across the globe. 85 Britain developed some of the earliest institutional practices that came to be emulated through the Western world. A separate powerful legislature was initiated when King John in 1215 gave a written commitment to seek the consent of Parliament to levy taxes to which he was entitled by feudal prerogative. Over the next five centuries, the British Parliament was transformed from an institution summoned at the desire of the ruler to one which met on regular occasions to develop policy inclinations independent of the wishes of the ruler.129 In the fourteenth century, Parliament was divided into two chambers: one chamber (the House of Lords) in which debate took place with the feudal lords and a second chamber (the House of Commons) 127 Fathali M. Moghaddam, The SAGE Encyclopaedia of Political Behaviour (2017). 128 Betty Drexhage, Bicameral Legislatures: An International Comparison, Ministry of the Interior and Kingdom Relations- Netherlands (2015), at page 7 129 Abhinay Muthoo & Kenneth A. Shepsle, The Constitutional Choice of Bicameralism, in Institutions and Economic Performance (Elhanan Helpman ed.), Harvard University Press (2008), at pages 251-252 137 PART E where the citizens were represented.130 The upper chamber of the British Parliament, the Lords, comprised of hereditary peers (whose number varied with the discretion of the King to create them). The lower chamber, the Commons, represented individuals satisfying a substantial property requirement. The two chambers in Britain reflected a kind of class division. Before the beginning of the eighteenth century, several factors such as civil war, regicide, experimentation with a republic, and the restoration of the titular monarch caused power to be permanently shifted from the King to Parliament.131 Around the same time, the British colonies in North America were crafting institutions of their own. Colonial legislatures were being conceptualized on similar lines, with some exceptions, to British Parliament. The Constitution for the newly formed United States adopted a bicameral system.132 The legislature in the United States was innovative, for it created a bicameral arrangement that replaced a class basis (as was in existence in Britain) for chamber representation with a modified federal basis. The Constitutional Convention of 1787 had provided for a lower chamber, a directly-elected House of Representatives, where each voter had an equal vote in elections, and an upper chamber, a Senate, to which each state could send two members, elected indirectly by the state parliaments. The Convention was a 130 Betty Drexhage, Bicameral Legislatures: An International Comparison, Ministry of the Interior and Kingdom Relations- Netherlands (2015), at page 7 131 Abhinay Muthoo & Kenneth A. Shepsle, The Constitutional Choice of Bicameralism, in Institutions and Economic Performance (Elhanan Helpman ed.), Harvard University Press (2008), at page 252 132 Betty Drexhage, Bicameral Legislatures: An International Comparison, Ministry of the Interior and Kingdom Relations- Netherlands (2015), at page 8 138 PART E compromise between those who wanted a parliament in which the states, irrespective of their population size, would have an equal voice, and those who wanted a Parliament for the newly formed federal nation where the participating states were represented in proportion to the size of their population. A system with two differently composed chambers was ultimately chosen to be the only way out of the deadlock.133 The rationale for a bicameral legislature comprising of a directly elected Lower House and an indirectly elected Upper House was best articulated by James Madison, in the Federalist Papers:
“First… a senate, as a second branch of the legislative assembly, distinct from, and dividing the power with, a first, must be in all cases a salutary check on the government. It doubles the security to the people, by requiring the concurrence of two distinct bodies in schemes of usurpation or perfidy, where the ambition or corruption of one would otherwise be sufficient… Second. The necessity of a senate is not less indicated by the propensity of all single and numerous assemblies to yield to the impulse of sudden and violent passions, and to be seduced by factious leaders into intemperate and pernicious resolutions… Third. Another defect to be supplied by a senate lies in a want of due acquaintance with the objects and principles of legislation. It is not possible that an assembly of men called for the most part from pursuits of a private nature, continued in appointment for a short time, and led by no permanent motive to devote the intervals of public occupation to a study of the laws, the affairs, and the comprehensive interests of their country, should, if left wholly to themselves, escape a variety of important errors in the exercise of their legislative trust… A good government implies two things: first, fidelity to the object of government, which is the happiness of the people; secondly, a knowledge of the means by which that object can be best attained… Fourth. The mutability in the public councils arising from a rapid succession of new members, however qualified they 133Betty Drexhage, Bicameral Legislatures: An International Comparison, Ministry of the Interior and Kingdom Relations- Netherlands (2015), at page 7 139 PART E may be, points out, in the strongest manner, the necessity of some stable institution in the government…”134 Madison conceptualized that the second chamber would fulfil significant roles:
(a) it would provide the certainty that the government will not neglect its obligations to its constituents, as the chamber provides an extra check on it;
(b) it can curb the actions of the other chamber if it gives into the urge to follow ‘sudden and pronounced sentimental reactions’; (c) it can meet the need for expertise in the framing of laws and the interests of the country, and thus help to avoid legislative mistakes; and (d) it can be a factor for stability that ensures continuity in the administration of the country. 86 Bicameralism, in both systems, emerged as a development associated with the changing conceptions of the state. The literature on bicameralism has highlighted the importance of having a second chamber in the legislature of a state. William Riker has emphasized that a bicameral structure acts as a control over the tyranny of a majority.135 Levmore similarly echoes this thought:
“At the very least, if the two chambers consider an issue simultaneously, one chamber’s agenda setter will be at the mercy of the order of consideration in the second chamber.
Bicameralism can thus be understood as an antidote to the manipulative power of the convenor, or agenda setter, when faced with cycling preferences.”136 134 James Madison, The Federalist No. 62 – The Senate, The Federalist Papers (1788), available at http://www.constitution.org/fed/federa62.html 135 William H. Riker, The Justification of Bicameralism, International Political Science Review (1992), Vol. 13, Issue 1, at pages 101–16.
136 Saul Levmore, Bicameralism: When Are Two Decisions Better than One?, International Review of Law and Economics (1992), Vol. 12, at pages 147-148. 140 PART E A study137 commissioned by the Dutch Ministry of the Interior and Kingdom Relations analysed the design of the bicameral system in several countries. The study consulted constitutional texts and literature on the evolution of bicameralism and came to the finding that:
“Historically, the creation of bicameral systems, both in the federal and the aristocratic variant, always was a concession to those (states or estates) who risked losing power in the new setting. In emerging democracies, and up until the present day, the choice of a bicameral system appears as a means of dispelling fear about the consequences of democratisation and reconciling established elites with the democratisation process. In developed democracies, the rationale of a bicameral system is now sought primarily in the possibility of combining different systems of representation (particularly in federal systems) and in the possibility of reconsideration by a different chamber in the legislative, making it possible to avoid making mistakes and enhancing both the quality and the stability of the legislation. In majority systems of the Westminster model - where the government is part of the lower house and it tends to have a stable majority -
a senate moreover is sometimes ascribed the role of giving more independent input into the parliamentary work, less determined by party discipline, and of paying more attention to the interests of minorities. A bicameral system is, for that reason, sometimes recommended as a means to protect minorities against a tyranny of the majority… Finally, a bicameral system may also increase efficiency because it is possible to divide the legislative workload between two chambers. That can be the case when the two chambers absorb a sort of division of labour (e.g. an emphasis on technical legal quality in the senate). In many bicameral systems, moreover, it can be decided to put bills to either house, and the senate also has a right of initiative.”138 87 The importance of the second chamber increases when there is no single party rule in Parliament. Governments that lack Upper-House majority 137 Betty Drexhage, Bicameral Legislatures: An International Comparison, Ministry of the Interior and Kingdom Relations- Netherlands (2015).
138 Ibid, at pages 11-12 141 PART E support find it difficult to pass Bills.139 Elliot Bulmer notes pertinently that in a democracy, a second chamber addresses the inability of the elected chamber to adequately represent a diverse society. In this view, a second chamber may enable a “more nuanced and complete representation of society, with greater representation for territorial, communal or other minorities”.140 While discussing the advantage of second chambers in republican legislatures, Rogers observes that the institution of a second chamber generates legislative advantage only “if the chambers differ significantly from one another”.141 Quoting from the work of various scholars, he observes:
“Hammond and Miller find that “The stability-inducing properties of bicameralism are . . . dependent on the existence of distinctly different viewpoints in the two chambers”… Buchanan and Tullock conclude similarly that, “unless the bases for representation are significantly different in the two houses, there would seem to be little excuse for the two-house system”… Because two “congruent” chambers would ostensibly not significantly affect policy outcomes, Lijphart described bicameral systems with congruent chambers as “weak” forms of bicameralism…”142 88 Bicameralism, when entrenched as a principle in a constitutional democracy, acts as a check against the abuse of power by constitutional means or its use in an oppressive manner. As a subset of the constitutional principle of division of power, bicameralism is mainly a safeguard against the abuse of the constitutional and political process. A bicameral national 139 James N. Druckman & Michael F. Thies, The Importance of Concurrence: The Impact of Bicameralism on Government Formation and Duration, American Journal of Political Science (2002), Vol. 46, No. 4, at pages 760-771.
140 Elliot Bulmer, Bicameralism, International Institute for Democracy and Electoral Assistance (2017), at page 4 141 James R. Rogers, The Advantage of Second Chambers in Republican Legislatures: An Informational Theory, at page 6, available at https://ecpr.eu/Filestore/PaperProposal/beb20221-c2c5-4475-9b9f-74bb3f1512a7.pdf 142 Ibid 142 PART E parliament can hold the government accountable and can check or restrain the misuse of government power. Among its other roles is that of representing local state units, acting as a body of expert review, and providing representation for diverse socio-economic interests or ethno-cultural minorities.
While deliberating over the necessity of having a second chamber, the Constituent Assembly had the benefit of examining the constitutional history of several other nations. The constitutional advisor, B N Rau, found the issue of second chambers to be “one of the most vexing questions of political science”.143 Under colonial rule, bicameralism had already been introduced. The first bicameral legislature as the national assembly for India was established by the Government of India Act 1919. The Government of India Act, 1935 had created an Upper House in the federal legislature which consisted of members elected by the provincial legislatures as well as representatives sent by numerous princely states that were not under the direct control of the British government. The 1935 Act became the blueprint for the structure of Parliament in the new Constitution. The Rajya Sabha, as the Upper House of the Parliament, was adopted into the Constitution. The vision of the Constitution makers behind the establishment of the Upper House of Parliament has found expression in the classic work of Granville Austin:
143Granville Austin, The Indian Constitution: Cornerstone of a Nation, Oxford University Press (1966), at page 195 143 PART E “The members of the Constituent Assembly had one predominant aim when framing the Legislative provisions of the Constitution: to create a basis for the social and political unity of the country… The goals of the Constituent Assembly… were to bring popular opinion into the halls of government, and, by the method of bringing it there, to show Indians that although they were many peoples, they were but one nation.”144 89 Article 80 of the Constitution deals with the composition of the Rajya Sabha. The maximum strength of this chamber is 250 members, out of which up to 238 members are elected representatives from the states and union territories. 12 members are nominated by the President among persons with a special knowledge or practical experience in literature, science, art and social service. Members representing the states are elected by the state legislatures through proportional representation by means of a single transferable vote145. The method of electing representatives from Union territories has been left to prescription by Parliament.146 In a departure from the American model of equal representation for the states, the allocation of seats in the Rajya Sabha to the States and Union territories is in accordance with the division provided in the Fourth Schedule of the Constitution (read with Articles 4(1) and 80(2)). The reason behind this division of seats is “to safeguard the interests of the smaller states while at the same time ensuring the adequate representation of the larger states, so that the will of the representatives of a minority of the electorate does not prevail over that of 144 Granville Austin, The Indian Constitution: Cornerstone of a Nation, Oxford University Press (1966), at pages 180 & 203 145 Article 80(4), The Constitution of India 146 Article 80(5), The Constitution of India 144 PART E those who represented the majority”147. In this sense, the Rajya Sabha has a special structure.